Futures Settlement vs. Cash Spot

Discussion in 'Commodity Futures' started by mrman500, Aug 14, 2008.

  1. I heard a snippet that said the grain futures settlement prices have not been reflecting the cash markets at the time of expiration.

    Can anyone confirm that?
  2. Easy to find news on this. From one article:

    "Cash soft red wheat for July delivery in Toledo on Friday was $1.67 under nearby CBOT September wheat, which closed at $8.11 per bushel. The basis between cash and the CBOT July future was as wide as $2.50 before the contract expired earlier this month. The lack of convergence has resulted in a "much wider and more volatile basis" and made futures prices a "less reliable indicator of the true underlying value of commodities," the National Grain and Feed Association said. "